Enhancing triparty repo transactions with IBM MQ for efficiency, security and scalability

The exchange of securities between parties is a critical aspect of the financial industry that demands high levels of security and efficiency. Triparty repo dealing systems, central to these exchanges, require seamless and secure communication across different platforms. The Clearing Corporation of India Limited (CCIL) recently recommended (link resides outside ibm.com) IBM® MQ as the messaging software requirement for all its members to manage the triparty repo dealing system.

Read on to learn more about the impact of IBM MQ on triparty repo dealing systems and how you can use IBM MQ effectively for smooth and safe transactions.

IBM MQ and its effect on triparty repo dealing system

IBM MQ is a messaging system that allows parties to communicate with each other in a protected and reliable manner. In a triparty repo dealing system, IBM MQ acts as the backbone of communication, enabling the parties to exchange information and instructions related to the transaction. IBM MQ enhances the efficiency of a triparty repo dealing system across various factors:

• Efficient communication: IBM MQ enables efficient communication between parties, allowing them to exchange information and instructions in real-time. This reduces the risk of errors and miscommunications, which can lead to significant losses in the financial industry. With IBM MQ, parties can make sure that transactions are executed accurately and efficiently. IBM MQ makes sure that the messages are delivered exactly once, and this aspect is particularly important in the financial industry.
• Scalable and can handle more messages: IBM MQ is designed to handle a large volume of messages, making it an ideal solution for triparty repo dealing systems. As the system grows, IBM MQ can scale up to meet the increasing demands of communication, helping the system remain efficient and reliable.
• Robust security: IBM MQ provides a safe communication channel between parties, protecting sensitive information from unauthorized access. This is critical in the financial industry, where security is paramount. IBM MQ uses encryption and other security measures to protect data, so that transactions are conducted safely and securely.
• Flexible and easy to integrate: IBM MQ is a flexible messaging system that can be seamlessly integrated with other systems and applications. This makes it easy to incorporate new features and functionalities into the triparty repo dealing system, allowing it to adapt to changing market conditions and customer needs.

How to use IBM MQ effectively in triparty repo dealing systems

Follow these guidelines to use IBM MQ effectively in a triparty repo dealing system and make a difference:

• Define clear message formats for different types of communications, such as trade capture, confirmation and settlement. This will make sure that parties understand the structure and content of messages, reducing errors and miscommunications.
• Implement strong security measures to protect sensitive information, such as encryption and access controls. This will protect the data  from unauthorized access and tampering.
• Monitor message queues to verify that messages are being processed efficiently and that there are no errors or bottlenecks. This will help identify issues early, reducing the risk of disruptions to the system.
• Use message queue management tools to manage and monitor message queues. These tools can help optimize message processing, reduce latency and improve system performance.
• Test and validate messages regularly to ensure that they are formatted correctly and that the information is accurate. This will help reduce errors and miscommunications, enabling transactions to be executed correctly.

CCIL as triparty repo dealing system and IBM MQ

The Clearing Corporation of India Ltd. (CCIL) is a central counterparty (CCP) that was set up in April 2001 to provide clearing and settlement for transactions in government securities, foreign exchange and money markets in the country. CCIL acts as a central counterparty in various segments of the financial markets regulated by the Reserve Bank of India (RBI), namely., the government securities segment, that is, outright, market repo and triparty repo, USD-INR and forex forward segments.

As recommended by CCIL, all members are required to use IBM MQ as the messaging software for the triparty repo dealing system. IBM MQ v9.3 Long Term Support (LTS)IBM MQ v9.3 Long Term Support (LTS) release and above is the recommended software to have in the members’ software environment.

IBM MQ plays a critical role in triparty repo dealing systems, enabling efficient, secure, and reliable communication between parties. By following the guidelines outlined above, parties can effectively use IBM MQ to facilitate smooth and secure transactions. As the financial industry continues to evolve, the importance of IBM MQ in triparty repo dealing systems will only continue to grow, making it an essential component of the system.

Source: ibm.com

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Mitigating demand volatility to improve forecasting: an intelligent workflow from IBM and SAP

Organizations are continuing to emerge from the lingering effects of the pandemic and ongoing supply chain disruptions. They are focused on reviving their strained supply chains and trying to understand their vulnerabilities and risk areas. What most are finding is that volatility remains in full force and continues to have detrimental impacts on planning and executing their supply chains.

One of the ways the SAP and IBM partnership are helping clients is through the joint creation of a new supply chain solution for demand planning. This unique fusion of SAP Integrated Business Planning (IBP) and IBM machine learning algorithms and proprietary data sets can help companies better manage volatility in the supply chain, even in the case of unforeseen disruptions like a pandemic.

The IBM Institute for Business Value’s Smarter Supply Chain Study details why this intelligent workflow solution is needed. When asked how challenging the pandemic had been for planning demand, 62.7% of supply chain executives answered, “Extremely Challenging.” And 64% of the same group said “Demand Volatility” was an extreme challenge to deal with in current conditions. The results from this study paint an all-too-familiar picture of how disruptive events in the supply chain lead to pronounced volatility, which has a bullwhip effect throughout the remaining areas of a supply chain. All this volatility comes at a steep price: for example, out-of-stock conditions alone amount to nearly USD 1 trillion in lost sales every year.

IBM Continuous Intelligent Planning with SAP IBP

This is why IBM and SAP teamed up to develop helpful intelligent workflows as part of our evolution partnership. The first workflow centers on this demand volatility challenge and provides key demand-sensing capabilities to help companies better forecast for short-term planning. Here’s how it works:

◉ SAP IBP generates a traditional, time-series-based forecast that accurately projects demand across the mid- to long-term planning horizons to help clients gain visibility into future needs.

◉ IBM’s Demand Sensing Intelligent Workflow focuses on the short-term horizon and “senses” recent, actual demand signals and their potential influence on the forecast to limit the chance of surprises. It analyzes both internal data sets (such as point-of-sale (PoS) and warehouse withdrawals) and external data (such as weather forecasts, IBM’s COVID-19 Risk Index and social sentiment) and draws correlations between these factors and the forecast.

◉ It then quantifies these correlations into short-term forecasts and passes them over to IBP through a custom integration layer. Our approach produces a comprehensive demand plan that is accurate across all planning horizons and helps to better account for volatility by incorporating a much larger collection of data sets than typically used.

By using this intelligent workflow, companies can expect benefits including:

◉ Improved forecast accuracy by 20–30%

◉ Reduction of inventory levels by 5–10%

◉ Detection of early signs of disruption and shifts, and a better understanding of their interdependencies and impacts

◉ Reduced stock-outs, leading to higher customer satisfaction

There are more supply chain disruptions on the way and the resulting volatility that accompanies them. Is your supply chain ready? Is your organization struggling with demand volatility and mitigating it in your demand plans? Is supply chain volatility impacting your ability to meet customer needs? Make your digital transformation a reality by bringing intelligence to your entire enterprise.

Source: ibm.com

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3 ways to avoid EDI pitfalls during peak events

Over the last year, consumers and business buyers have dramatically changed how they procure products and services, highlighting just how important digital transformation now is to building resilience. During expected or unexpected peak events, IT leaders and B2B managers need confidence that their B2B infrastructure operating behind the scenes — connecting retailers, distributors, manufacturers and suppliers throughout the lifecycle of a customer order — can keep pace as demand spikes.

As you face peak events and the certainty of change, here are three ways you can shore up your B2B systems and infrastructure to be ready for surges in EDI transaction volumes.

1. Keep orders flowing in the cloud

As orders for products surge and are fulfilled, you need to replenish inventory — fast. Orders must continue to flow across your supply chain to ensure distributors ship additional products to stores or warehouses, and manufacturers have the supplies they need to make more products and keep the pipeline full. But if your EDI system slows under mounting transaction volumes or worse, completely fails, you lose the ability to communicate with your trading partners and receive orders from your customers. Critical transactions, like orders and ship notices, are delayed.

Eric Doty of Greenworks Tools keeps orders flowing without hiring more staff with a cloud-enabled multi-enterprise business network that enables reliable, secure and scalable B2B exchanges. As this power equipment manufacturing company expands its global presence, the network provides a more efficient and cost-effective way to track the increasing number of orders. The solution digitizes and automates transactions and uses AI technology to deliver deeper insights into B2B processes.

With visual reports and natural language queries, business users can quickly track the status of an order without help from IT to make faster and more-informed decisions and deliver better customer service. Greenworks Tools is keeping up with global B2B transaction growth and realizing a 40 percent IT cost savings by putting EDI insights into the hands of business users.

2. Get flexibility to auto-scale

2020 has taught us that peak events can happen at any time for a variety of reasons. There are black swan events like a pandemic, but weather, seasonal, regional, and industry-specific events are far more common. Sometimes you can anticipate disruptions, and other times you can’t. Either way, you can eliminate worry by being prepared. A business network that’s available as a cloud or hybrid solution, makes it fast and easy to scale up or down to support growing or slowing transaction volumes and manage costs.

Cinram links some of Europe’s biggest media producers and retailers with consumers of music, TV shows and movies, helping to keep shelves stocked with popular titles. Volumes spike during peak periods, but also when highly-anticipated media releases become available. With a cloud-based business network, Cinram has maintained close to 100 percent uptime and can easily scale up the system when business volumes spike. They can add EDI connections rapidly without having to worry about provisioning new hardware to deliver the consistent, fast response and reliable service their clients have come to expect.

3. Invest in proven B2B infrastructure

To keep pace with demand peaks, like those some industries saw due to COVID-19, you need the capability to and suppliers quickly. Faster onboarding means eliminating slow and error-prone manual processes with more efficient digitized processes. IT leaders are doing this now with B2B infrastructure built for multi-enterprise connectivity, automation of manual processes, and transaction visibility to exchange necessary information without disruption.

Saint-Gobain, a leading global manufacturer of abrasives, is putting their cloud-based, B2B infrastructure to work every day, all day, and have cut costs per line order by 92 percent. They are transacting securely with customers through EDI rather than manually and onboarding new customers faster. They have moved several vendors to EDI, all using one generic map. And Chase Shelby, eBusiness Manager, aims to bring on as many customers to EDI as possible to drive further efficiency and gain competitive advantage. With automation and visibility, they are receiving orders 24×7 and providing customers real-time updates on order and shipment status.

They’re also simplifying the inherent complexity in their environment, even when one PO may include made-to-order products and stock products, or a complementary product from one of Saint-Gobain’s partners that will be drop shipped. In one simple query, customer service reps can retrieve all documents related to the PO for streamlined tracking. Automation has freed-up customer service reps for other value-added tasks, and Shelby points to additional savings from moving some of the in-house server load to the cloud.

Business buyers’ procurement expectations have changed forever, and there’s no turning back to phone and paper-based transactions. So, B2B managers must increasingly look to digital channels to meet demand and build resilience. With a proven B2B infrastructure that is available as a cloud or hybrid cloud option, there’s no need to worry about keeping orders flowing with your customers and suppliers or scaling up or down easily. IT leaders and B2B managers can take on peak events and the certainty of change with confidence.

Source: ibm.com

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Cost and value transformation in an economic downturn

On March 15, the Dow dropped nearly 3000 points in a single day; the worst day of trading since 1987. Since then, the global economy has come to a near standstill and has been on a steep economic downturn after years of strength. What can companies can do today to focus on cost transformation while many industries face upheaval?

In this quick Q&A, two leaders in IBM Services, Eric Pilkington and Lucas Manganaro, articulate how companies should improve and automate workflows, which can lead to an upskilled workforce and better efficiency, and how prioritizing customer needs and transforming the way companies generate value can have positive impacts to overall company cost transformation strategies.

Question #1: In response to the economic downturn, there has been a lot of discussion on enterprise “cost transformation.” What does this term mean to you?

Eric: Every business wants to strike a balance between cost, price, efficiency, and elasticity. The ability to automate certain tasks that will enable a company to deploy less human capital holds value for companies. When it comes to true cost transformation, we need to discuss cost and value transformation – a way to cut costs without negatively impacting the customer experience. In this case, value is defined as value to the business and value to the customer. Often, I have seen leaders engage first on cost cutting and second on value while undergoing a digital transformation. For example, if a company over-automates and solely relies on technologies and data without accounting for upskilling or reskilling their employees, the value to the business and customer experience could actually decrease in the long run.

This downturn is already causing layoffs, which will drive further investment in automation, which will reinforce new ways of working, all in an effort to cut costs. As we embark on these cost cutting exercises so necessary to many companies today, we should remember to strike the balance between value and cost transformation.

Question #2: What is top-of-mind for clients today with regards to applying cost transformation and intelligent workflows in an economic downturn?

Lucas: In the wake of this economic downturn, companies have changed the way they do business, with most employees working from home. Despite this, most clients that I’m speaking with are focused on maintaining business continuity as much as possible. We should remember to lead with Emotional Intelligence and then follow with IQ, since individuals are now packing in additional work into a less efficient working situation.

In this rapidly changing environment, CEOs are shifting their attention to prepare for revenue contractions, and therefore focusing on using data to understand the pieces of their business that remain core vs. not core to their bottom line and customer value. Leaders want to use data from their digitization initiatives to inform their decision-making. However, they’re quickly finding that while the data exists, it is not readily available to drive real-time action. This only further stresses the need to intelligently digitize data in a way that can be impactful and available to business leaders across the organization.

Question #3: What steps can companies take to reduce cost and improve process efficiency during this new economic environment?

Eric: First, as a leader, ensure that you have created and communicated an organization-wide “North Star” and confirm that all parts of the business effectively map back to that instead of perpetuating existing siloes. If this is done effectively, we can then look across the organization, understand how different pieces interconnect, and identify gross inefficiencies to improve end-to-end processes and ultimately begin the cost transformation. Equally importantly, we will also be able to identify opportunities to improve the customer experience.

Lucas: The first thing I advise: conduct an initial analysis to understand where your company spends money and what is currently in your contracts. From there, you can decide what work is critical vs. not critical. You can then determine secondary and tertiary levels of criticality when it comes to delivering your product from a value and cost perspective.

Some companies are currently facing a spike in demand in the wake of this pandemic (think delivery, Amazon, food retail). These companies face challenges in meeting that demand with the right mix of inventory. In this example, leaders should focus attention on understanding the pivot required in inventory planning and look further upstream and downstream in the supply chain to ensure that customer expectations are met.

Alternatively, many other companies are seeing a complete drop-off in demand, and therefore should take a different approach in the immediate term. Leaders must make difficult decisions to know what pieces of the business can be shut down to minimize costs, and they must ensure that the final finished inventory of product is excellent to maintain customer value. Access to intelligent data is critical during this exercise to ensure that leaders create some financial stability for their companies and for suppliers.

Bottom–line: What do you need to do today?

Recognize that as a business leader or as an employee, you do not need to solve for everything tomorrow. We are in unprecedented times, and while we may be doing internal ‘rocket science,’ we do not have to build the entire rocket at once; we still build it one bolt at a time. So, the next step is to pick up the hammer and start chipping away, beginning with understanding your data and making tough decisions.”

Source: ibm.com

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Building operational resiliency for anytime, anywhere and any situation

History is riddled with unexpected challenges and, more importantly, the creative ways people rose to overcome them. Difficult times, like we face today, call for businesses to reconsider transformation of workflows, workforces and workplaces to both recover from current disruption and to ensure preparedness for the next challenge — whatever it may be.

Shared services organizations must continue to deliver productivity, controls, costs savings, user experience, business insights and operational resiliency. We work with our clients to deliver these business outcomes with a combination of intelligent workflows, smarter operations and reimagining how work gets done.

◉ Intelligent workflows reimagine the end-to-end workflow, interact with data trapped in disparate IT systems and apply innovative technologies like automation and artificial intelligence to boost productivity and deliver totally different experiences for stakeholders.

◉ Smarter operations start with agile, self-driven and motivated cross-functional teams. Teams have virtual stand-up meetings to address daily work tasks, while the technology teams work in parallel to implement solutions from ideas generated by agile teams driving continuous improvements. Control tower enables management and team leaders with prescriptive insights to monitor early warning indicators, orchestrate change in real time, and develop iterative and proactive change management.

◉ Borderless workplaces embrace flexible possibilities now available that ensure safety and security for services providers and their employees to be significantly more resilient, responsive and proactive in delivering services at even higher level of productivity and effectiveness.

Together, these elements can help businesses be responsive to their employees, suppliers and customers, as well as adapt and respond to potential disruptions.

Supporting clients for immediate operational continuity

At IBM, we are proud of the way our teams around the world have stepped up to the challenges of COVID-19.

◉ In 10 days, our delivery teams in 60 centers across 40 countries to shifted to work from home.

◉ Now, more than 99% of our teams have safely and effectively transitioned to working from home to support client operations.

◉ There has been zero degradation in the delivery of services, such as responding to employee queries, running payroll, recruiting critical staff, supporting month-end financial close, paying suppliers, and performing risk and compliance reviews.

Automatic Data Processing, Inc. (ADP) provides human resources management software and services and handles one in every five paychecks in the Unites States. Given the sensitive nature of this work, there was naturally some concern about security and the risk associated with working from home when the COVID-19 crisis hit. The IBM Services team in Naga, Philippines worked with ADP to implement daily agile standups and helped the company make changes and prepare new plans for business continuity. Within two weeks, 98% of the Naga City team was working remotely with portable laptops, physical desktops and Wi-Fi dongles.

Another client, a large telecommunications company, might have been hit hard by shelter-in-place orders, as 100% of the company’s employees worked in its delivery centers across multiple countries. With the support of the IBM Services team and a new end-to-end workflow orchestration program, the company shifted to 100% work-from-home and reported no interruption in service to presales. And, given the spike in demand for telecommunications, the company saw an 18% increase in volume. The company was able to accommodate the demand and bring backlogs to an all-time low — even with increased volume.

But supporting clients in a time of global emergency isn’t always a neat start-to-finish job. When one of North America’s largest financial institutions found finance business processes suddenly threatened by a challenging environment and an overwhelmed provider in the wake of COVID-19, the IBM Services team quickly stepped in to help avoid service interruption. The IBM Services team accelerated the ramp-up process and facilitating security access, identification credentials and knowledge transfer to ensure the client had the necessary support they needed. The transition was complete within eight days and the organization reported no service interruption.

Executing for the future

The key question for business now is: what’s next? What does the future look like? In a period where we look forward to recovery and stability, it is critical to think about how business process services teams can continue to meet expectations of productivity, controls and cost reductions, while providing experiences and insights with higher levels of resiliency.

Our approach with intelligent workflows, smarter workforces and borderless workplaces can help shape the transition from immediate needs to sustainability and future planning. We are working with clients to improve cash flow right now, reduce operating expenses within months, drive ongoing transformation and enable resilient operations.

We will continue to support our teams and clients through this crisis, where everyone’s safety is paramount. IBM is looking to the future, planning for the significant changes and opportunities ahead when we return to the “new normal” in the coming weeks. Business continuity in a crisis doesn’t change the fact that there is a crisis, but a strong foundation of resiliency and business continuity planning can help to minimize the impact for employees and customers alike.

Source: ibm.com

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RPA and Intelligent Automation: Why establish an Automation Center of Excellence?

Through my various roles at IBM, I have had the pleasure of meeting a wide variety of Nordic clients on a regular basis. Common for all of them = On a quest to add value in an ever changing digital era.

Value is determined by assessing current performance, together with the future potential.

That means executives are on a never ending journey to operate efficiently in the present, while building the future and a better version of their organizations.

Thriving in the digital era has become imperative to succeed in both disciplines.

So how do companies thrive in a changing digital landscape?

In order to operate efficiently and build the future generations of themselves, the majority of the companies I meet, are leveraging a colorful palette of usual-suspect-technologies like AI, Cloud, Blockchain, Robotic Process Automation and chat bots. This, of course coupled with a mature digital core on the back of for e.g. the ERP system (This core is as many readers may know, not always geared for the 2020 version of digital transformation – but that is a different blog post).

Common for these usual-suspect-technologies is the aim to intelligently reinvent the way processes and people work, with the goal of delivering value to customers and shareholder.

Source: The human-machine interchange – How intelligent automation is reconstructing business operations 

A core part of what we at IBM do is exactly this; designing, implementing and managing intelligent and automated processes to increase business value.

In Denmark for example, we are working with the retailer Salling leveraging Robotic Process Automation (watch this video), the financial service provider Industriens Pension, leveraging AI and conversational agents and Fødevarestyrelsen, a public institution, leveraging intelligent workflows/business process management.

All cases are examples of using intelligent automation to make processes and people smarter and faster.

The key to success for these initiatives is to start small, create a measurable business value in production, but from the get-go have an understanding of the fact that at a given time, scalability, infrastructure, processes and organisation will become key enables of continued success and return on investment.

This is one of the reasons why we at IBM work with many clients on establishing (or re-launching) their Automation Center of Excellence.

Why are companies implementing an Automation Center of Excellence (CoE)?

First of all, it is impossible to perfectly integrate People, Processes and Technology in complete harmony.

It just will never happen, because of inherent struggles like organisational politics, the speed of which technology moves and the need for stability in core business processes and applications.

So stop aiming for the perfect state. Period.

The purpose of the Automation CoE is to get clients as close to perfect as possible by executing on the automation/digital strategy. It is the intersection of People, Processes and Technologies that make intelligent automation real.

The CoE defines the governance structure and helps identify and prioritise the pipeline. It furthermore provides the skills and technology to design, develop and manage the automations. Throughout the cycle, the CoE guides technology selection, resource management and benefits realisation at scale.

How does a successful CoE look?

The correct (and unredeemed) answer is: “It depends”.

The CoE can have different operating models dependant on the organisation in which it sits. This, among other things, comes down to whether the CoE should be federated (decentralised), centralised or a hybrid between the two. Furthermore, it is CRITICAL, that the CoE is connecting stakeholders from Executive Management, Business and IT. This ensures that all parties work towards a shared strategic business goal. The mutual and long term success of automation at scale depends on (near) frictionless cooperation.

To support this, HfS Research in Autumn 2019 invited IBM and 32 other automation industry experts to discuss the rules making Automation efforts a success.

Guess what? “Collaboration between IT and business” came out as Rule #1 and as Rule #3 the expert panel highlighted that “The automation strategy has to clearly connect with an overarching business strategy”.

The CoE facilitates exactly this, so why not get started right away?

IBM’s model for CoE competency areas. Source: IBM

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